When Raj Gupta, former CEO of specialty chemicals firm Rohm and Haas, came to the U.S. from India as a young man, he had just eight dollars with him. Over the course of his career — he was with Rohm and Haas for more than 40 years — Gupta worked in different parts of the world and rose to leadership positions. “Selecting the right organization you work with and then having the belief in yourself, that it’s going to be a fair place for you to realize your potential, if you get that combination, I think the sky is the limit for most of us,” says Gupta.

In a conversation with Knowledge@Wharton and Michael Useem, director of the Wharton Center for Leadership and Change Management, Gupta talks about his book Eight Dollars and a Dream: My American Journey, which he wrote with Syd Havely, president of Havely Consulting.

An edited transcript of the conversation follows.

Knowledge@Wharton: Raj, what inspired you to write this book?

Gupta: I have two daughters who married late and then we had three grandsons born over a period of two to three years. Both of my daughters one day, out of the blue, came to me and said, “Dad, we have lived an interesting life all around the world, and these kids are so young, I don’t know what stage you will be in by the time they are teenagers, so would you mind documenting the family history?” So that’s how the project started — writing the family history.

By the time I got to the age of 22 and [how I came] to the U.S., it became difficult to separate growing up in the U.S., raising the family, finding my bearings at work. So then it grew into something about living in England, living in France, living in Asia, and raising these two daughters, living in different cultures, dealing with different people. So it became an amalgam of the professional experience, the personal journey and the family life.

As I got into it, it became apparent that just my telling the story was not sufficient. That’s where we added another dimension to this — to have people who have dealt with me at different times in my life, my mentors, lead director Sandy Moos, my predecessors, my board colleague Jack Krol, and above all, having my two daughters and my wife speak on their own behalf. And that was totally unadulterated. In fact, it was a great insight for me hearing from them as well. So it started off as a family history and it developed into something that you now see as a book. When we thought about who would be the audience for this book, in fact it wasn’t clear whether it was a personal life story, a business book, or something else. So it is pretty much a story as it was lived from my childhood growing up in India to my adult life and of course my post retirement.

Useem: In the book you make a very compelling case for the life course that you’ve been on. The personal as you’ve just described it, as the result of many people that you came to know, many people that influenced who you are, beginning with, of course, your parents. And then the professional side of the book — how you embarked on a career in business and management and ultimately leadership and how you became chief executive of Rohm and Haas. Could you describe a couple of people that have been especially influential, maybe personal, maybe professional, in shaping the person that you are and then had to be as you ran Rohm and Haas?

Gupta: Let me start with my parents because to me both my mother and father in their unique way had tremendous influence over six of us born over seven years between 1944 and 1951. The two things I take away from growing up in that family, it was actually counter culture in India.

One was living an honest life. My father was a civil engineer, building dams, bridges and canals. And you know, graft was pervasive, but my father never accepted one rupee of bribe in his life. And the second thing that was counter culture to me was respecting everyone, irrespective of what position they occupied in the society, whether they were higher-ups or the servers or the cleaners or the drivers, [my parents] treated everybody with respect.

And those two things have stuck with me all my life. And the third thing I would say I carry from my mother in particular was the notion that you [must] work hard, and you [must] work honestly; consequences are beyond your control, except what comes as a result. So I think those are the things that go back to my family and my parents.

As an adult I would say I was very fortunate to work in an organization like Rohm and Haas for nearly 40 years. It was a true meritocracy. Irrespective of where you came from, what your background was and how you spoke your English, you felt like you were part of the family and treated as an equal. And you had equal opportunity to contribute. So the fact that I was given an opportunity to go work in England, which in itself was a unique experience in the late 1970s and early 1980s, then moving on to France and then coming back to England and then living in Asia for five years, the opportunities that the company provided me were absolutely unbelievable.

During that career there were three or four people at Rohm and Haas who were instrumental in shaping me and believing in me more than I believed in myself. One was the CFO who recruited me, Fred Shaffer. Then there were my two predecessors, Larry Wilson who was CEO before me for 10 years, and before him was Vincent Gregory, the first non-family CEO for 20 years. These individuals really had an incredible impact on me. And the last one was Basil Vassiliou, a Greek who headed Europe for Rohm and Haas, a unique individual. These four had an enormous impact on me in shaping my beliefs.

Useem: What would you single out from one of them that has been a kind of lasting influence on who you are and what your style has been?

Gupta: I learned things that I wanted to practice, and I also learned things which I didn’t particularly care to follow. So you learn both the good and the bad. From Larry Wilson, I learned maintaining your composure and calm demeanor under stress. I also learned how to be a good listener and to always present yourself as the person in charge. And I think to me that served me very well during my career.

With Vassiliou who was a kind of fighter, street fighter, a very smart man but always controversial, I think I certainly learned that you can have brilliant ideas but you also need to figure out how to best present them and get consensus around them.

Useem: Raj, just to take that forward in time, we’re all the product of our parents, our friends, maybe a college or a high school teacher along the way, but as you became chief executive in 1999 of Rohm and Haas, that was a job you hadn’t done before. You had not been a chief executive before. So while you brought many qualities such as staying cool under fire from some of the mentoring you had, you also had to master a very challenging job. So just thinking about the first 12 months, what did you have to learn that you didn’t already have in your skill repertoire set on becoming chief executive officer?

Gupta: Well, I can think of a number of things. First of all, we transformed the company from a midsized specialty chemical company, largely organically grown, to investing $6 billion of cash to buy three companies in rapid succession: Morton International, Rodel and Lea Ronal. We went from 10,000 employees to 23,000 employees in a period of one quarter. We went from zero debt to more than $4.5 billion in debt. And we had a completely new leadership team at the top. It was a task bigger than I had thought, for sure. The way I approached this was, number one, to make sure that I got to hear from the board, each of the board members, and met with them individually to understand what they liked about the way we worked and what we could improve on, made sure they knew me and they felt I had access to them and they had access to me.

Useem: You actually went to meet with each of them individually?

Gupta: Yes, I did. I went out to where they were located and spent a couple of hours with each one of them. They of course knew me, I knew them, but it was always sitting in the boardroom and the occasional dinner as a group. So this, to me, was extremely helpful and served me well as we managed our way through the challenging times the first couple of years.

The second thing was that right after we made these acquisitions everything that could go wrong did go wrong. We had 64 ERP systems. Information was late in coming. Business was declining. Currencies were going the wrong way. And we had a new management team in place.

So very quickly, I said rather than trying to do everything, what are the two or three most critical things that we need to focus on. Number one was to get the right people in the right jobs. Number two was to manage for cash. And number three, that we are not in business for just another six months or a year; we need to invest in our future, and that was globalization in Asia and investing in technology and innovation. These were the four pillars that we really focused on for the first two or three years after I became CEO to get the company through the crisis and in a shape that became very successful after that.

Knowledge@Wharton: I was struck by what you said about hitting a crisis as a result of these acquisitions. Research shows how easy it is to destroy value after acquisitions, and a lot of mergers don’t work out for that reason. How did you gather your team around a strategy that would ensure that the mergers that you had entered into would build value rather than destroy value?

Gupta: Well, I wish I could say they were all successful. And I do agree that more and more data shows that large, complex mergers destroy value rather than create value. Having said that, separating companies into companies that are more focused, and divestitures of under-performing businesses, always adds value. So acquisition is a tricky game. And most of them really fail, in my view, because of people issues, less to do with the business logic or strategy, because smart people make decisions about which businesses fit, what is the fair value. And you do a lot of homework on that before you do the acquisition. And once you do that, in my view, that’s when the hard work begins. It is the people side of the equation. If that’s not handled right, that’s when things really fall off the cliff.

And the second thing I would say is timely information. If you don’t have information to manage a complex new company, you are really fighting a hard battle. These are the two things that I would say [are critical]. Strategic logic. Culture. All of that you can define upfront. But getting these two pieces right in terms of how would you manage, who are the right people, and do you have the information that really shows that you’re tracking the vision or the strategy, the reason for which you made those acquisitions.

Knowledge@Wharton: What kind of people issues did you face and how did you deal with them?

Gupta: There are two or three different parts to this. One is you always find individuals who are very successful in building and growing [businesses]. When they’re faced with a tough challenge of a shrinking market, shrinking margins, a turn around situation, that’s a different skill. And so, for a lot of people, when you have a lot of tailwind behind you and things are going well, with a growth oriented mindset, and all of a sudden they’re faced with this, it’s hard for them to recognize it first, but they think they can get past that. And then, it is important to navigate your way to cut costs, manage for cash, and have a strong operational focus. So that’s one thing.

The second thing I would say is the just the demeanor of people. That goes back to staying calm under stress. When you are under extreme change situations where rapid action is required, you generally see two kinds of individuals, ones who kind of just panic and they’re trying to push buttons on many different fronts, and the others who stay calm, figure out what the right priorities are and just focus themselves and the whole organization on making sure that key things happen and not get troubled by or disturbed by the noise around them.

Useem: Turning to a career phase that followed your service at Rohm and Haas, in 2009, you helped engineer a sale of the company to Dow Chemical. And in the years since then you’ve served on a number of very prominent boards of directors, including Vanguard Group, the manager of almost $5 trillion in assets these days, Tyco International, that had gone through a wrenching restructuring, Arconic, a spin-off from Alcoa, Hewlett-Packard, which, when you were there, went through a breakup into its now two separate parts. Thinking about your role on these different boards, what do you feel makes for a really good independent, non-executive member of a board of directors?

Gupta: Great question, Mike. First of all I’ve been very fortunate that post Rohm and Haas I’ve had the opportunity to serve on boards of leading companies in different industries. I consider myself very fortunate. I think one of the most important requirements for a board member is to first of all [realize that] it’s not a part-time job anymore. It’s a job that requires a lot of time, not only meeting during the board sessions but also outside of that.

Useem: Raj, if I can intervene on that. In surveys that some of these firms that consult with boards conduct, they often say that a director on average will spend about 200 hours a year in their service as a non-executive director. That’s always seemed very high to me. Is that a correct figure do you think?

Gupta: I would say that in the normal course of time today in the U.S. corporations, it’s a pretty reasonable figure. And having been involved in some of these transformational companies that you’ve just mentioned, Tyco and Alconic and Hewlett Packard, even Delphi, they have taken a lot more time.

Useem: More than that.

Gupta: I think the most important thing about a board member is having an independent mindset. It is so important. And associated with this is what I call critical thinking. And the last thing I would say is having the courage to ask the tough questions. So, the first is to have an independent mind. Of course that’s based on experience. The second one is critical thinking. That means they’re always looking at things from the outside in, in a very objective manner. And the third one is to have the courage in a group setting, even in the face of a very strong CEO, to ask the tough questions.

“If you are humble and available for a conversation and open feedback, it makes you a better person and a better leader.”

Useem: I’ve got the same question on another aspect of what you do as a non-executive director. You don’t do it often, but when you do it you do have to get it right. And that is to pick a CEO successor. It’s often said that’s the biggest decision that the board makes. And having made quite a few of those, what in your own experience defines the kind of person you would like to be a CEO successor coming in, assuming that the company is doing well? So not in a triage moment, but a normal moment, what makes for a great CEO candidate?

Gupta: Well, I’ve gone through some great selections and some not great selections. Based on my experience, it is by far the most important job the board does. And frankly, the board only gets to do it hopefully every five to 10 years. If they get it wrong, the consequences are hugely negative. And if they get it right, it’s transformational in a positive way for the organization. So picking the right person is extremely critical.

If we have a good succession process in place, having an internal candidate, in my belief, is always better than an external one. And especially an internal one who is an insider/outsider, somebody who knows the organization, knows the businesses, but always looks at their organization from an outside, external point of view. And that’s the objectivity that’s very important, not to be mired in what you know and what you don’t from inside.

The second thing, maybe it’s an overstated word, is learning agility and skills. The business world is changing so fast. That’s what I find fascinating across industry, the common threads and themes, but folks who are always willing to learn and adapt, this is a very important skill. The third one I would say is surrounding themselves with people smarter than them, and sometimes getting out of their way as well. This human side of the equation to me is perhaps the strongest trait a leader should have because in today’s world everybody has a great strategy, there’s plenty of money available. The sole differentiator between successful organizations and the not so successful is the leadership at the top and the leadership team broadly. If you get that right, I think it makes a whole lot of difference.

Knowledge@Wharton: That leads me to one of the things that I found most memorable about your book, which are reflections towards the end of your book. And one of them that touched my heart was where you talked about the importance of leaders learning to balance a healthy ego with humility. I wonder if you could give some advice on how CEOs can do that and how you managed that balance in your own life.

Gupta: I’m glad you asked that question. Maybe this is just me or my nature, I think humility opens you to a lot of good input from outside because if you are approachable and humble, people will tell you what they like about you, what they don’t like about you. And I think when you rise to these senior, very high positions, it’s so easy to surround yourself and always hear how great you are. And that to me is a big danger for most leaders.

“Very quickly, I said rather than trying to do everything, what are the two or three most critical things that we need to focus on.”

On the other hand, having self-confidence and a healthy ego is an important part of demonstrating your confidence and the self belief that you have. That’s very important as well. If you want to be decisive, you have to trust your instincts. You have to have a healthy ego. On the other hand, I think if you are humble and available for a conversation and open feedback, it makes you a better person and a better leader.

Useem: So Raj, the title of your book — I’ve always found very interesting because it really references what you had in your pocket, a few dollars, when you arrived in the U.S. And thinking back to that early phase in your life and speaking to people, let’s say of about the same age, those maybe in their teens, 20s and 30s, given the wisdom that you’ve acquired by serving on boards, given the wisdom that you acquired by serving as chief executive, what advice would you have for people who have a few dollars in their pocket, they’re in their early 20s, but they one day would like to have an impact on the world akin to the impact you have had?

Gupta: Well, you know, having a belief in yourself is an important asset to have. And not limiting yourself. Most of us limit ourselves rather than somebody else telling you. One of the great lessons I learned when I was here as an immigrant in the early years, all my Indian friends who were my age and similar family backgrounds, they would tell me occasionally that, “We will never become managers. We are engineers or we are scientists. That’s all we will be. Technicians. Technical experts. But we’ll never become leaders or managers.” And for whatever reason, I’m so glad I had a chance to get out of the U.S. and live in a different environment and shed that notion. And over time, I think, belief in yourself is so important.

And the other thing I would say is working in an organization that you feel will give you a fair chance, because organizations have their own culture. Selecting the right organization you work with and then having the belief in yourself, that it’s going to be a fair place for me to realize my potential, if you get that combination I think the sky is the limit for most of us.